Expected hike in rate.
- Dow up 2.88, Nasdaq down 17.51and S&P down 2.29.
-Yield on 10-year bond closed at 5.13% and 30-year bonds at 5.19%.
-Crude oil rose $1.44 to close at $72.13 per barrel.
-Gold up $4.20 to close at $705.70 and platinum up $20.40 to $1259.70.
-Emerging markets in Argentina, Mexico and Brazil rose 1% or more.

U.S. averages down for most of the day due to the Federal Reserve increasing the interest rate a quarter percent to 5% making it the highest rate in five years. DOW recovered slightly in late afternoon trading, up .02%. Two notable decliners of the day were Legg Mason (LM: chart) which was 22 cents short expectations, and Dell Inc. (DELL: chart) which closed with its stock down 21 cents. Gold hit a 25-year high at over $704. It has risen more than 35% this year and 57% since the beginning of last year.

Cisco (CSCO: chart) shares fell 4.3% to close at $20.75 after the company released its expense forecast for this quarter. The company’s revenue rose 18%, topping Wall Street expectations by $.15 billion. News Corp (NWS: chart) closed up .58%. Its share rose 1.78% to $19.44. News Corp also said that it has boosted its buy-back program from $3 billion to $6 billion. The company reported that its profit more than doubled to $820 million in the third quarter.

American International Group (AIG: chart) reported adjusted net earnings of $1.29 a share short of the expected $1.36 a share. This was a 4.6% gain over the $1.23 share last year. The company’s net income fell almost 16% to $3.2 billion from $3.8 billion a year earlier. Hartford Financial Services, Inc. (HIG: chart) has agreed to pay out $20 million to settle annuities probes. There were complaints by regulators from New York and Connecticut that the company secretly paid brokers kickbacks to recommend its group annuities to pension plans.


3:25 PM Toyota shares down 34 cents in afternoon trading.
Toyota Motor Corp (TM: chart) reported a 39% rise in fourth quarter profit. Quarterly sales were up 18% from a year ago. It sold 7.97 million vehicles around the world, up from 7.4 million a year ago, and sold 2.6 million in North America, up from 2.3 million last year. The stock price has risen from $73 a year ago to $121. Legg Mason, Inc. (LM: chart), a global asset management firm, reported its net income $1.03 a share, short of the anticipated $1.25 a share, but up from 98 cents a year ago. Its shares fell 6.1% in the Wednesday afternoon trade.

Baidu.com, Inc (BIDU: chart), a Chinese-language Internet search provider, reported Q1 earnings of $4.4 Million vs. $312,000 a year ago. Revenue increased 196.8% to $16.9 million, compared to the estimated $15.14 million up from $5.6 million a year earlier. Global Imaging Systems, Inc. (GISX: chart), a provider of office technology solutions, reported Q4 earnings of 63 cents a share, up from 57 cents a year ago. Revenue rose from $247.4 million to $268.6 million in the latest three month period vs. one year ago. It has earned 64 cents a share in the latest quarter.


12:30PM European markets closed in the red.
European markets extended losses to finish in the negative ahead of the U.S. Fed Reserve interest-rate decision. The U.S. central bank is expected to raise its federal funds target rate to 5%. Weaker dollar against the euro pressured export-related issues like tech stocks Infineon Technologies, Philips Electronics, and SAP. However, carmaker DaimlerChrysler rose 2.5% as Deutsche Bank upgraded the company to buy from hold and lifted its price target to 59 euros from 45 euros. The euro rose 0.4% to $1.2806. The German DAX 30 dropped 0.4%, the French CAC 40 declined 0.6%, and London’s FTSE 100 fell 0.4%.

Crude oil prices eased back as weekly petroleum report showed increasing gasoline supplies. Light sweet crude June delivery fell 19 cents to $70.50 a barrel. Gasoline rose 3 cents to $2.08 a gallon, while heating oil was up to $2.004. London Brent lost 23 cents to $70.85. European gold crossed $700, hitting a new 255-year high on weaker dollar and global tensions. In London the precious metal rose to $701 per troy ounce from $695.90. In Zurich gold gained to $701.70 from $694.40. In Hong Kong gold jumped $23.13 to $702.50. Silver closed at $14.30, up from $14.20. The U.S. dollar traded mixed in European trading ahead of FOMC meeting. The euro traded at $1.2796, up from $1.2753. The dollar bought 110.53 yen, down from $111.10. The British pound was quoted at $1.8638, down from $1.8657.

11:30AM The Dow advanced on General Motors.
Stocks gained some ground after the early weakness and the major equity indices turned mixed. The Dow moved to the upside, strongly supported by shares of General Motors (GM: chart) which extended yesterday’s gains to post an advance of 2.3%. The stock rose to a six-month intraday high. Health insurance stocks showed significant strength in early trading, with the Morgan Stanley Healthcare Payor Index up 1.4%, offsetting the 1.1% loss posted on Tuesday. The sector was sent higher by Sierra Health Services (SIE: chart) as shares of the health insurer rose 5.7% after Fitch Ratings upgraded the company''s senior debt ratings to BBB- from BB+. Airline SkyWest (SKYW: chart) was a conspicuous gainer among airline stocks with a gain of 6.3%. Airline stocks moved to the positive, benefiting from recent weakness in the price of crude oil. The Amex Airline Index rose 1%. The decrease in oil prices followed a petroleum report that showed rising U.S. gasoline inventories. The price fell to $70.40, contributing to some weakness among energy stocks. The Philadelphia Oil Service Index and the Amex Oil Index lost 0.6%.

The tech-heavy Nasdaq remained below the flat line, dragged by weakness among semiconductor stocks, with the Philadelphia Semiconductor Index down 1.6% The networking sector also pressured the tech index, with Cisco (CSCO: chart) shares down 2.9% on disappointing Q4 guidance. In late morning trading, the Dow added 7.84, or 0.07%, to 11,647.61, a fresh six-year high. The Standard & Poor''s 500 index was down 1.62, or 0.12%, at 1,323.52, and the Nasdaq composite index sank 9.59, or 0.41%, to 2,328.66. Bonds inched upward as traders awaited the Fed''s statement. The yield on the 10-year Treasury note slid to 5.11% from 5.13% late Tuesday.


Crude oil and gasoline inventories slightly rose.
Crude oil inventories ticked up in the latest week, according to government statistics released Wednesday. The advance was far more modest than the gains posted in the previous week. Meanwhile, stocks of gasoline also pushed higher, building on the prior week''s advance. he Department of Energy''s Energy Information Administration revealed that crude oil inventories advanced by 300,000 barrels for the week ended May 5. Specifically, the measure rose to 347.0 million barrels from the prior week''s level of 346.7 million barrels. The move in the latest period added to a gain of 1.7 million barrels recorded in the previous week. This advance was preceded by a decline of 200,000 barrels in the prior week and a slide of 800,000 barrels in the week before that. In the most recent week, oil inventories were 4.9% higher than their levels of the same time last year. Gasoline inventories posted a week-over-week advance of 2.4 million barrels, the government said. This followed an advance of 2.1 million barrels in the previous week, which broke an 8-week streak of losses. In the latest period, gasoline stocks were 3.8% below their levels of last year. Inventories of distillate fuel oil recorded a gain in the most recent week, rising by 200,000 barrels. This followed a decline of 1.1 million barrels in the previous week.

10.00 AM Indian index keeps on hitting new highs
Sensex in India put another 98.52 points or 0.79% to finish at an all-time high of 12,612.38. At one time in the trading it peaked at 12,624.37. The BSE recorded a turnover of Rs 4,815 crore, down from yesterday’s Rs 5,045 crore. The market breadth was robust, as the ratio of gainers to losers was 1.8:1. Bank shares led the gainers, as ONGC soared 3.5% to Rs 1,491 on 0.8 million shares, following its agreement with Halliburton Co to lift the output of its fields in Assam. ICICI bank also gained 3.7% to Rs. 663, while HDFC advanced 1% to Rs 863. State controlled banks advanced as well, State Bank of India gaining 2.4% to Rs 998.80 and Syndicate Bank soared 5% to Rs 100.50. Metal shares rose as well. Hindalco surged 5% to Rs 241.80, Nalco advanced 3% to Rs 324.50 and Sterile Industries ended up 2.6% to Rs 585.

Heavyweight Reliance Industries advanced 1.2% to Rs 1,169. Reliance shares soared ahead of the listing of Reliance Petroleum which is expected to be launched at Rs 80-82 up from its IPO price of Rs 60. L&T also put up 1% to Rs 2,802, having as many as 2.4 lakh shares change hands on the day. Cement shares were the main losers, as media reported that the government will most likely discuss ways to stem rising prices. ACC declined 2.2% to Rs 978, Gujarat Ambuja Cements lost 2.4% to Rs 117.25 and Grasim shed 1.5% to Rs 2395. Auto stocks were the other decliners with TVS Motors losing 2.8% to Rs 165, Maruti Udyog fell 1.6% to Rs 948.70 and Tata Motors shedding 1.4% to Rs 971.


9:45AM Stocks opened lower, dragged by Cisco and Federated.
Stocks opened lower Wednesday ahead of FOMC meeting as investors anxiously awaited Fed Reserve interest-rate decision and signals that the Fed will make a pause in rate increases. Negative sentiment was also generated by disappointing forecasts from Cisco Systems and Federated Department Stores. A day after Dell (DELL: chart) posted lowered expectations, Cisco (CSCO: chart) released modest outlook exerting further pressure on tech stocks. Federated also weighed on market mood after the company posted Q1 net income loss on costs from acquiring May Department Stores Co.

The broker/dealer sector stood out as a notable decliner, led by Legg Mason (LM: chart). The asset management firm fell more than 5.5% on disappointing earnings news. Some weakness was visible in the tech sector, with the semiconductor and disk drive sectors each down a little less than 1%. In contrast, housing stocks moved higher in the early trading hours, recovering from recent losses. In the first hour of trading, the Dow fell 15.20, or 0.13 %, to 11,624.57, but still stood at a six-year high. The Standard & Poor''s 500 index was down 2.55, or 0.19%, and the Nasdaq composite index sank 8.12, or 0.35%. Bonds were little changed as traders awaited the Fed''s statement. The yield on the 10-year Treasury note slid to 5.12 percent from 5.13 percent late Tuesday